RED DEER, Alberta -- Parkland Income Fund has agreed to acquire the fuel supply and marketing business of NOCO Energy Canada Inc. for $8.5 million (Canadian; $8.38 million U.S.). As reported in a CSP Daily News Flash on Friday, the acquisition includes 56 independently owned and operated Esso (Imperial Oil), Sunoco and NOCO retail gas stations and 69 wholesale accounts outside the Greater Toronto area. The all-cash transaction is expected to close at the end of May. It remains subject to customary commercial closing conditions and regulatory approvals.
Collectively, this group had fuel [image-nocss] volume sales of more than 300 million liters (76.25 million gallons) in 2007.
NOCO Energy Canada is affiliated with NOCO Energy Corp., Tonawanda, N.Y. NOCO Energy owns and operates a diverse group of businesses primarily focused on the sale and distribution of energy and petroleum products. It distributes a full line of commercial fuels, industrial lubricants, bio-products, home energy fuel and heating and cooling systems. And it now also provides natural gas and electricity to residential and commercial customers in the western New York service area. The company also operates more than 30 NOCO Express gas stations and convenience stores throughout western New York.
"With this transaction, Parkland is expanding its geographic presence into the Ontario market through the acquisition of a strong, successful operator in NOCO. We are moving east into new territory in a way that is consistent with our non-urban focus, growing total fuel volume at an affordable cost and building on the success of our branded distribution relationship with Imperial Oil," Parkland president and CEO Mike Chorlton said.
"The transaction expands our multi-brand strategy with the introduction of Sunoco, which holds a strong brand position in this market. Both Esso and Sunoco provide us with a platform for further expansion in the region. Ontario has a significant number of small, independent fuel marketers, and Parkland will be well-positioned to participate in future consolidation," he added.
In Ontario, Sunoco has a strong distribution network, a differentiated fuel offering in high-octane gasoline and premium diesel and a growing loyalty program. Esso is a well-recognized and respected national brand with strong loyalty and marketing programs, Parkland said.
As the Esso retail branded distributor in Alberta, Saskatchewan and part of British Columbia, Parkland purchases branded products from Imperial Oil and performs all marketing functions previously performed by Imperial Oil to 180 stations in its dealer network in the three provinces. The fund began its retail branded distributor relationship with Imperial Oil in 2005.
In February, Parkland acquired the business of freight transportation company Wiebe Transport Inc. for $9.1 million. Chorlton said at the time, “The acquisition of Wiebe…is highly complementary to our existing in-house fuel and related products hauling service. It will immediately meet our near-term objective of having the capacity to haul the majority of our retail and wholesale fuel volumes. The strategic addition of this business will allow Parkland to add capacity, versatility and flexibility in our long haul fleet while adding new service capabilities and customer base."
Red Deer, Alberta-based Parkland currently operates retail and wholesale fuels and convenience store businesses under its Fas Gas Plus, Fas Gas, Race Trac Fuels and Short Stop Food Stores brands and through independent branded dealers, and transports fuel and other products through its distribution division. With approximately 530 locations, Parkland has developed a market niche in western and northern Canadian non-urban markets.
It also supplies propane, bulk fuel, heating oil, lubricants, industrial fluids, agricultural inputs and associated services to commercial and industrial customers in Alberta, British Columbia and the Yukon Territory under the Neufeld, Joy, United Petroleum and Great Northern Oil brands. Additionally, Parkland operates the Bowden refinery near Red Deer as a storage and contract-processing site. The Fund is also a 25% joint venture partner in a study, due to be completed by the end of 2008, to determine the feasibility of building a $300 million facility to refine condensate into petroleum and other products.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.